choosing your compliance strategy towards 2020 · choosing your compliance strategy towards 2020 1...
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DNV GL © 2015 30 June 2017 SAFER, SMARTER, GREENER DNV GL © 2015
30 June 2017
Stine Mundal
MARITIME
Choosing your compliance strategy towards 2020
1
The class perspective
DNV GL © 2015 30 June 2017
Decisions, decisions…
5
External
factors
Ship
factors
Trading
pattern
Other;
Investment
Off-hire
Etc.
Different
choices
Different
challenges
Compliance options
DNV GL © 2015 30 June 2017
What are the options?
6
2020-01-01
3.5% S 0.5% S
Compliance options:
HFO
+Scrubber MGO/MDO
Alternative
Fuels
(LNG, Methanol, etc)
New Compliant
Fuels? (0.5%S)
To prepare for 2020, options should be evaluated and
strategies put in place to order to have the best
competitive edge in the market
Compliance options
DNV GL © 2015 30 June 2017
Choosing a compliance strategy
7
Present and possible future NOx-ECAs are also subject to the 0.1% Sulphur cap.
Hence it is important to consider a total compliance strategy when choosing
technology solutions.
SOx Scrubber
Low sulphur fuel
Alternative fuels (LNG/Methanol/etc)
MGO
LNG
SOx compliance strategy NOx compliance strategy
Selective Catalytic
Reaction (SCR)
Exhaust Gas
Recirculation
(EGR)
High Pressure
Low Pressure
High Pressure
Low Pressure
Main technology alternatives
Compliance options
DNV GL © 2015 30 June 2017
SOx Scrubbers: Statistics
8
Compliance options
Number of ships with installed scrubber - cumulative
DNV GL © 2015 30 June 2017
Low Sulphur Fuels
Consideration of alternative fuels
- availability
- safety
- cost
Need for Low Sulphur Fuels
– In the ECAs
(30-50 Mt/year today)
– Globally after 2020
( 300 Mt/year)
10
Compliance options
DNV GL © 2015 30 June 2017
Global bunker demand
11
Distillates
Distillates for blend
LSHFO
HFO (Scrubber)
Source : PIRA energy
LNG
MMB/D
Compliance options
DNV GL © 2015 30 June 2017
CAPEX & OPEX
12
Cost comparison example for a NB Handimax Bulk carrier
Compliance options
DNV GL © 2015 30 June 2017
What is the legal basis for enforcement?
14
UNCLOS forms legal basis for
jurisdiction
– Coastal states have full jurisdiction
in internal waters, jurisdiction in
EEZ limited to environmental
protection
– High seas belong to no state
Flag states have jurisdiction over ships flying its flag
Port states exercise port state control based on domestic law
Enforcement and compliance
DNV GL © 2015 30 June 2017
Enforcement during the transition
15
We believe the rush to source compliant
fuel will start late in 2019. Accordingly we
expect to see;
Some bunkering facilities unable to
provide compliant fuels
Some bunkering facilities will not have
cleaned tanks prior to taking LS fuels
A large number of ships with > 0.50% fuel
remaining on board, causing a serious
disposal issue
Ship fuel tanks/piping contaminated with
> 0.50% fuel, causing inadvertent non-
compliance
Significant non-compliance is expected during the first months of the transition. How enforcement and penalty levels will be managed remains an open question.
Enforcement and compliance
DNV GL © 2015 30 June 2017
How to get ready?
FEB
Business case Concept development
Initiation Operation
Contract
Basic design
Detailed design
Installation
Commissioning
Operation
Inspection Sign-off
Emission Reduction
ECA compliance option
Selection of
Solution
Technology qualification
HAZID for
installation
Special risk
workshops
Automation
testing (HIL)
Emission
Testing
Fuel change calculator
16
DNV GL © 2015 30 June 2017
DNV GL Classification - Supporting the low Sulphur future
DNV GL Rules and Class Notations for
– CLEAN and CLEAN DESIGN Notation
– LNG READY Notation
– SCRUBBER READY Notation
– Exhaust Gas Cleaning systems (Scrubbers)
– …
General
regulations
Materials and
welding
Hull System and
components
Ship types Additional class
notations
Fleet in
Service
Part 1 Part 2 Part 3 Part 4 Part 5 Part 6 Part 7
17
How can DNV GL assist?
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